COMMERCIAL & ECONOMIC CASE

LNG is economically viable

LNG-fuelled propulsion is already proving to be a cost-effective solution to meeting emissions limits in certain US and European ECAs. It can also be an economic solution for deep-sea shipping trades where vessels spend an estimated 50% or more of their time in ECAs.

The economics are currently more challenging in the deep-sea container and bulk commodity shipping sector. However, the implementation of the IMO’s 0.5% global sulphur cap will support LNG uptake, as it is likely to drive up demand and therefore prices for MGO and LSFO. By contrast, scrubbers require significant additional capital expenditure (capex), are operationally complex and have waste management issues.

It is SEA\LNG’s view that there is considerable scope to drive down capex costs for key LNG gas equipment, for example tanks and new vessel designs. This will be driven by scale, experience, OEM investments in R&D, and shipyard innovations in designs for both new-build and retrofit as confidence grows in demand and participants better plan and co-ordinate their investments.

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